Trade Adjustment Costs in Developing Countries: - World Bank ...

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Trade Adjustment Costs in Developing Countries 19There are several themes that are not covered by the chapters but that are potentiallyrelevant for the adjustment costs/impact agenda. Two areas stand out.One is the nature of adjustment in factor markets in low-income developingcountries. The research on labour reallocation typically focuses on more advanced,middle-income economies, like Brazil or Uruguay; as well as developedcountries. There is much less knowledge on adjustment in low-income countries,especially in Africa, where the share of manufacturing is generally very smalland issues of agricultural adjustment at the smallholder level are much more relevant.The papers on the dichotomy between cash crops and food crops in Africaare good examples of the type of work that is needed, but needs to be expandedto include additional issues. Data limitations are of course a major constraint.The linked employer-employee data available in Brazil, for instance, does notexist in most poor countries with a large rural sector. Survey data on households,firms, and workers are, however, increasingly becoming available and will hopefullybe used more to study trade-adjustment issues.Another priority area for research is the role of domestic institutions, buildingon the types of insights that are developed in the chapter on distortions by KalaKrishna. While the term ``institutions’’ is often too broad to generate specific policyinsights or guidance, it is clear that a deeper understanding of how a giveneconomy adjusts to trade requires deep knowledge of the setting that characterizesthe functioning of the economy. This depends heavily on the institutionalcontext that governs incentives and therefore drives the adjustment process.The synthesis of research on adjustment to trade in developing countries collectedin this volume demonstrates that our knowledge is still very imperfect.However, it does suggest that for developing countries – especially low-incomeeconomies with large informal and agricultural sectors – the key issues go beyondadjustment by (wage) workers to a new equilibrium and the transitional costs ofunemployment, job search and so forth. These are issues that have attracted muchof the attention in the trade and labour literature, in part driven by political economyconsiderations (e.g., Sapir, 2000; Verdier, 2005). While certainly also relevantfor developing countries, identifying and addressing the constraints that impedethe ability of households to leave subsistence and the informal sector, and thatlimit the scope for firms, farmers and communities to benefit from greater tradeopportunities should be a research priority.Bernard M. Hoekman is Director of the International Trade Department of TheWorld Bank and a CEPR Research Fellow.Guido Porto is Professor of Economics at Universidad Nacional de La Plata,Argentina.
20Bernard Hoekman and Guido PortoREFERENCESBesley, T., and R. Burgess (2004). “Can Labour Market Regulation Hinder Economic Performance?Evidence from India,” Quarterly Journal of Economics 119(1): 91–134.Bhagwati, J. (1971). “The generalized theory of distortions and welfare,” in: J. Bhagwati,R. Jones, R. Mundell and J. Vanek (eds.), Trade, Balance of Payments and Growth: Papersin International Economics in Honor of Charles P. Kindleberger, North-Holland,Amsterdam.Borensztein, E., J. De Gregorio and J-W. Lee (1998). “How Does Foreign Direct InvestmentAffect Economic Growth?” Journal of International Economics 45: 115–135.Chen, S. and Martin Ravallion (2004). “How Have the World’s Poorest Fared since theEarly 1980s?,” World Bank Research Observer 19(2): 141–69.Chesnokova, T. (2007). “Immiserizing deindustrialization: A dynamic trade model withcredit constraints,” Journal of International Economics 73(2): 407–20.Freund, C. and B. Bolaky (2008). “Trade, regulations, and income,” Journal of DevelopmentEconomics, 87(2): 309–21.Galiani, S. And G. Porto (2010). “Trends in Tariff Reforms and in the Structure of Wages,”The Review of Economics and Statistics, 92(3).Hoekman, B. and B. Javorcik (2004). “Policies to Encourage Firm Adjustment to Globalization,”Oxford Review of Economic Policy, 20(3): 457–73.Hoekman, B. and L. A. Winters (2007). “Trade and Employment: Stylized Facts and ResearchFindings,” in Antonio Ocampo, K.S. Jomo and Sarbuland Khan (Eds.), PolicyMatters: Economic and Social Policies to Sustain Equitable Development, New York,Zed Books, London, Opus, New Delhi.Hoekman, B., K. Maskus, and K. Saggi (2005). “Transfer of Technology to Developing Countries:Unilateral and Multilateral Policy Options,” World Development, 33(10): 1587–602.Keller, W. (1996). “Absorptive Capacity: On the Creation and Acquisition of Technology inDevelopment,” Journal of Development Economics 49: 199–227.Khanna, G., D. Newhouse, and P. Paci (2010). “Fewer Jobs or Smaller Paychecks? LabourMarket Impacts of the Recent Crisis in Middle-Income Countries,” Economic PremiseNo. 11. Washington DC: World Bank.Maloney, W.F. (2004). Informality Revisited. World Development 32 (7): 1159–1178.Matusz, S.J., and D. Tarr (1999). “Adjusting to Trade Policy Reform,” Policy Research WorkingPaper No. 2142, World Bank, Washington, DC.Melitz, M. (2003). “The Impact of Trade on Intra-Industry Reallocations and AggregateIndustry Productivity,” Econometrica, 71(6): 1695–725.Motohashi, K. (2002). “Use of Plant-Level Micro-Data for the Evaluation of SME InnovationPolicy in Japan,” OECD Science, Technology and Industry Working Papers 2002/12,OECD, Directorate for Science, Technology and Industry.Noland, M. and H. Pack (2003), Industrial Policy in an Era of Globalization: Lessons fromAsia. Washington DC: Institute of International Economics.Papageorgiou, D., M. Michaely, A. Choksi (eds) (1991). Liberalizing Foreign Trade. 7 volumes.Basil Blackwell, Oxford for the World Bank.Pakes, A. and R. Ericson (1998), “Empirical Implications of Alternative Models of FirmDynamics”, Journal of Economic Theory 79, 1–45.Rama, M. and D. MacIsaac (1999). “Earnings and Welfare after Downsizing: Central BankEmployees in Ecuador,” World Bank Economic Review 13: 89–116.Sapir, A. (2000). “Who Is Afraid of Globalization? The Challenge of Domestic Adjustmentin Europe and America,” CEPR Discussion Paper 2595.
Page 1 and 2: THE WORLD BANKTrade Adjustment Cost
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Page 9 and 10: viiiContents10. Trade Adjustment an
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Page 16: PrefaceThe process of globalization
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Page 40: PART AADJUSTMENT COSTS
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7Trade Reform, Employment Allocatio
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144Gordon H HansonOn the theory sid
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146Gordon H Hansonberg et al. (2008
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148Gordon H HansonThe expansion of
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150Gordon H Hansonshares and factor
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152Gordon H HansonGoldberg, Pinelop
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172Pravin Krishna and Mine Zeynep S
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11Trade, Child Labor, and Schooling
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198Gordon H Hanson3.0%2.8%2.6%2.4%2
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200Gordon H HansonTable 12.2: Share
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202Gordon H HansonWho benefits from
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204Gordon H HansonAn older and larg
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206Gordon H HansonTo date, the lite
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208Gordon H Hansontion surplus was
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210Gordon H HansonSome evidence sug
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212Gordon H HansonBIBLIOGRAPHYAcost
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214Gordon H HansonMishra, Prachi 20
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216James Harrigan• China had been
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218James Harrigan2.2 Price and quan
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220James HarriganFigure 13.1a: Pric
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222James Harrigan4. CONCLUSIONThe e
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224Beata S Javorcikices, thus benef
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226Beata S Javorcikfor plants which
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228Beata S JavorcikAs the majority
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230Beata S Javorcik5. DOES FDI LEAD
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232Beata S Javorcikthough they do n
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234Beata S Javorcik7. FUTURE RESEAR
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236Beata S JavorcikMarkusen, James
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238Chad P Bownthese theories has on
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240Chad P Bownicy changes affect th
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242Chad P Bownis, the policy-imposi
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244Chad P Bownsignificant distortio
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246Chad P Bownaccession period led
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248Chad P Bown2002-03. 16 However,
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250Chad P Bowntive adjustment impac
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PART CFACTORS THATAFFECT TRADE
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256David Hummelsative advantage for
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258David Hummelsprices shift demand
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260David HummelsThe second form of
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262David Hummelsdogenous to how pro
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17The Duration of Trade Relationshi
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The Duration of Trade Relationships
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18Openness and Export Dynamics:New
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19Market Penetration Costs andInter
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20Taking Advantage of Trade:The rol
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Taking Advantage of Trade: The role
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332Miet Maertens and Jo Swinnenmeas
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23Notes on American Adjustment Poli
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362Johan F M Swinnen and Kristine V
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This book summarizes the state of k
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